Speaker 1: Good morning. It's Monday, the fourth of December here in London.
Speaker 1: This is the BlueBag Daybreak Here podcast. I'm Caroline Hepka and.
Speaker 2: I'm Stephen Carroll. Coming up today, Iranian backed Hoothy Rebels
Speaker 2: attack commercial ships in the Red Sea as Israel ramps
Speaker 2: up its offensive in Gaza.
Speaker 1: Bill Gates warns the world probably won't meet its climate goals,
Speaker 1: as Bloomberg finds Banks green reporting lacks consistency.
Speaker 2: Plus eight three hundred pounds worse off. Britain's economic stagnation
Speaker 2: leaves households counting the cast, according to one new report.
Speaker 1: Let's start with a roundup of our top stories. A
Speaker 1: US Navy ship has responded to a florri of drone
Speaker 1: and missile attacks against commercial ships operating in the Red Sea.
Speaker 1: The destroyer USS Carney blamed Yemen's Hoothy Rebels for what
Speaker 1: it said were four attacks against three separate vessels. Those
Speaker 1: included an attack on the UK owned cargo ship, the
Speaker 1: Unity Explorer, which caused minor damage which Retired US Marine
Speaker 1: Colonel Steve Ganyard says that the Pentagon fears escalation.
Speaker 3: The use is being very careful not to turn the
Speaker 3: Red Sea into a shooting gallery who these continue to
Speaker 3: target what they say are only Israeli ships, But the
Speaker 3: US needs to be assured and the world needs to
Speaker 3: be assured that there's freedom of navigation and that ships
Speaker 3: could print it the heavily trafficked Red Sea.
Speaker 1: Steve Ganyard, reflecting on the growing fears for the safety
Speaker 1: of vessels in the busy shipping lane. Last month, the
Speaker 1: rebels in Yemen issued a threat against ships with ties
Speaker 1: to Israel in the area, calling them quote legitimate targets.
Speaker 2: The regional escalation comes as Israel's military expands its operations
Speaker 2: against Hamas. Days after a week long truce came to
Speaker 2: an abrupt end. The Israeli military is now warning many
Speaker 2: of the territory's two point two million residents to evacuate
Speaker 2: parts of southern Gaza as it ramps up airstrikes on
Speaker 2: the territory. He bit TV from the aid organization Care International.
Speaker 4: The winter is already in Gaza. People left without proper clothing.
Speaker 4: Most of them they already sleep outdoor in the overcrowded churches,
Speaker 4: and now with this new evacuation, many of them say,
Speaker 4: we know we need to evacuate, but we don't know
Speaker 4: where to go with a new order.
Speaker 2: That warning from one AID agency comes as John Kirby,
Speaker 2: spokesman for the US National Security Council, said Israel had
Speaker 2: taken steps to minimize civilian casualties.
Speaker 5: We've urged them to as they go south, We've said,
Speaker 5: we've said publicly, we don't want to see them move
Speaker 5: into the south unlesser until they have accounted for that
Speaker 5: additional now civilian population, because they move folks out of
Speaker 5: the north and the South, hundreds of thousands of them,
Speaker 5: we want to make sure that they're properly accounted for.
Speaker 5: And again them publishing this map online and dropping leaflets
Speaker 5: and informing people of where not to go. I mean
Speaker 5: that is a step in the right direction.
Speaker 2: That's John Kirby speaking the hamaser On Health Ministry in Gaza,
Speaker 2: says more than fifteen thoy five hundred people have been
Speaker 2: killed since the conflict began eight weeks ago. Israel around
Speaker 2: four hundred of its soldiers and fifty nine police personnel
Speaker 2: have been killed since the deadly seventh of October attack.
Speaker 1: And now two stays around climate change, Bill Gates sees
Speaker 1: a hotter world, failing to stop temperatures from rising even higher.
Speaker 1: Once the world's richest man, Gates has devoted large sums
Speaker 1: of money to fighting climate change. At this year's cop summit,
Speaker 1: he told Bloomberg humanity will miss global warming targets that
Speaker 1: were set at the twenty fifteen Paris Agreement.
Speaker 6: No, we won't hit the aspirational targets. Well, you can
Speaker 6: do the mouth on one point five.
Speaker 7: And even two point zero. Isn't that likely.
Speaker 1: Gates is still optimistic that the world can avoid becoming
Speaker 1: three degrees celsius warmer than the pre industrial era, but
Speaker 1: scientists point to this is extreme weather as an omen
Speaker 1: of the damage that climate change is causing.
Speaker 2: Bitcoin has hed a nineteen month high of more than
Speaker 2: forty one thousand dollars. The cryptocurrency's stellar performance comes after
Speaker 2: a turbulent period for the token in the wake of
Speaker 2: ftx as collapse. Lucy Gasmararian is the managing partner and
Speaker 2: founder at Token Bay Capital. She explains why she sees
Speaker 2: bitcoin surging.
Speaker 8: You know, there's a combination of factors going on here.
Speaker 8: I'd say, you know, expectations that interest rates are potentially
Speaker 8: going to you know, start coming down next year, and
Speaker 8: then the big thing in the sort of crypto circles
Speaker 8: is that the bitcoin harving that's coming up, where the
Speaker 8: rewards for miners that are mining bitcoin transactions gets cut
Speaker 8: in half so you get a supply shot.
Speaker 2: Lucy Gasmararian speaking there, Bitcoin is jumped by more than
Speaker 2: one hundred and fifty percent this year to outstrip other
Speaker 2: investments like stocks and gold.
Speaker 1: UK households are now roughly eight thousand pounds poorer than
Speaker 1: those in France and Germany, according to a major new report.
Speaker 1: Two think tanks behind it so that Britain is in
Speaker 1: fifteen years of stagnation and has called the government's economic
Speaker 1: plan quote not serious. Bloomberg's James Worcock has the story.
Speaker 9: The Resolution Foundation and the Center for Economic Performance say
Speaker 9: the UK might have had its own lost decade of growth.
Speaker 9: The two top think tanks say Britain's earn less and
Speaker 9: are now less productive than rival countries, but despite their
Speaker 9: major new report calling for more investment and funding for
Speaker 9: public services, taxes are at a postwar high. Labour leader
Speaker 9: Kissed Armer praised Margaret Thatcher over the weekend and says
Speaker 9: his party won't turn on spending taps if elected in London.
Speaker 9: James Wilcock, Bloomberg Radio.
Speaker 2: And the Chinese developer Evergrant has won a reprieve in
Speaker 2: a restructuring agreement with creditors. Bloomberg's Brian Curtis has more
Speaker 2: from Hong Kong.
Speaker 10: This buys some time Forevergrand and its creditors to do
Speaker 10: a deal. Hong Kong Court has earned a winding up
Speaker 10: proceeding until January twenty ninth. The unexpected delay came as
Speaker 10: the original petitioner did not push for an immediate liquidation.
Speaker 10: Bloomberg has report or did that offshore creditors want a
Speaker 10: controlling interest in Evergrand and its two Hong Kong units.
Speaker 10: The builder has offered them a minority stake. Expect a
Speaker 10: lot of back and forth now over the next eight
Speaker 10: weeks in Hong Kong. Brian Curtis, Bloomberg Radio.
Speaker 2: Now in a moment, we'll be discussing fears of greenwashing
Speaker 2: and sustainable investment goals for banks. But the story that
Speaker 2: caught Maya this morning from COP twenty eight. Obviously, we've
Speaker 2: been talking about a lot of the big conversations happening there,
Speaker 2: the global agreements to try and tackle renewables, But an
Speaker 2: idea from a Russian billionaire to look at how the
Speaker 2: tundra ecosystem in Siberia could be maintained to stop the
Speaker 2: release of methane emissions from the thawing permafrost there as well.
Speaker 2: His idea is to recreate a time when Woolly Mammetz
Speaker 2: wrote roam to the tundra. This is something that we're
Speaker 2: trying to see. He's demonstrating with the sort of digital
Speaker 2: illustration of what it would look like if I sage
Speaker 2: animals were wandering the tundra in Siberia. But that's yes.
Speaker 1: Is that serious or is this the sort of because look,
Speaker 1: coming with COP twenty eight, all sorts of ideas and
Speaker 1: a bit of a kind of trade show. Feel basically
Speaker 1: on the side of COP twenty eight, a lot of
Speaker 1: businesses come to kind of talk about all of the
Speaker 1: climate change issues. I mean, I suppose there's a there's
Speaker 1: been a lot of criticism that is being held in
Speaker 1: a petro state effectively, and so one wonder is that
Speaker 1: is that a serious proposition?
Speaker 11: Yeah?
Speaker 2: I mean, look, you're not alone and thinking that. Robert Savans,
Speaker 2: is a Harvard University professor of environmental economics, says you
Speaker 2: could think of this as more of a circus where
Speaker 2: the main event is sometimes eclipsed by the prominence of
Speaker 2: trade shows as well. It is something it's I think
Speaker 2: it's not quite mammots that we're looking at as well,
Speaker 2: but it is the idea of trying to restore what
Speaker 2: the ecosystem was at the time of the mammoths, to
Speaker 2: be able to try and contain and stop essentially the
Speaker 2: permafrast melting at the rate that it is because of
Speaker 2: the risk of releasing more methane, which is actually more
Speaker 2: damaging to the climate than other greenhouse gas missions.
Speaker 1: Yea, absolutely, but the major challenge that you're trying to
Speaker 1: deal with climate change and what that means. Continued coverage
Speaker 1: then on the program this morning of the COP twenty
Speaker 1: eighth summit, which obviously is on for a whole fortnite.
Speaker 2: Let's go next though, to the Middle East, where Israel's
Speaker 2: military is expanding operations across Gaza, while a US Navy
Speaker 2: ship has responded to drone and missile attacks against commercial
Speaker 2: ships in the Red Sea. We've got Bloomberg senior reporter
Speaker 2: Anthony's cuisine with us in Tel Aviv this morning. Anthony,
Speaker 2: let's start with what's been happening in Gaza. The Israeli
Speaker 2: military offensive targeting the south of Gaza. What more can
Speaker 2: you tell us?
Speaker 11: Okay, Well, obviously it's a pretty intense campaign. We just
Speaker 11: had news that the IDF says it hit about two
Speaker 11: hundred targets overnight, So a lot of air strikes and
Speaker 11: other ordinance, all in a very crowded area where most
Speaker 11: of Gaza two point two million people are now hold up.
Speaker 11: It's a very difficult situation because Israel has come under
Speaker 11: intense criticism for the number of civilian casualties in its
Speaker 11: campaign in northern Gaza in recent weeks before the Truth
Speaker 11: and now it's proceeding into southern Gaza. And while it
Speaker 11: has set up a safe zone and has been putting
Speaker 11: a map online and dropping leaflets to tell people where
Speaker 11: to go, AID agencies and Gazans themselves are saying they
Speaker 11: don't know what's going on and where to go, and
Speaker 11: they feel they've got nowhere left to go.
Speaker 1: So how what is the response then, when the likes
Speaker 1: of the US Vice President Kamala Harris are warning Israel
Speaker 1: about civilian casualties in Gaza? How significant is it? A
Speaker 1: change in tone from the Biden administration.
Speaker 11: Absolutely, the Biden administration officials have become more strident over
Speaker 11: the last few weeks in cautioning Israel to be exercisemare
Speaker 11: caution to try and limit the number of civilian casualties.
Speaker 7: They're coming under a lot of.
Speaker 11: Pressure at home and also from the international community about
Speaker 11: the death toll, which local authorities in Gaza put at
Speaker 11: more than fifteen thousand, five hundred, many of those children.
Speaker 11: But at the same time, the US has said it
Speaker 11: supports Israel's broad aims in the war of destroying Hamas
Speaker 11: and retrieving its hostages, which still stand at one hundred
Speaker 11: and thirty seven.
Speaker 2: And you we're also monitoring events in the Red Sea too,
Speaker 2: after we had that firing by US Navy ship intervening
Speaker 2: because of fire from Hooty rebels and Yemen. How series
Speaker 2: is an escalation of the events that we've seen in
Speaker 2: the Red Sea.
Speaker 11: Well, certainly yesterday was the most most intense activity we've
Speaker 11: seen since the conflict began in October seven. The hoofi's
Speaker 11: head said that they would target Israeli in ships, and
Speaker 11: there've been a couple of instances so far, but yesterday
Speaker 11: there was a lot of activity, with three or four
Speaker 11: vessels targeted. None of them were badly damaged. But the
Speaker 11: US naval did have to fire on drawings and perhaps missiles,
Speaker 11: and definitely it's an escalation of.
Speaker 1: Sorts, okay. And so in terms of what it means
Speaker 1: in a widening of the conflict in the Middle East,
Speaker 1: how much concern is there around that, I don't think.
Speaker 11: I don't think we should overplay it. I don't think
Speaker 11: it means that there as you know, there's going to
Speaker 11: be new players dread into this conflict. But what it
Speaker 11: does mean is that one of the world's most important
Speaker 11: passageways for ship traffic is increasingly perilous, and that threatens
Speaker 11: the world trade and the global economy.
Speaker 10: So it's it's a pretty big deal.
Speaker 2: Okay, Anthony, thank you very much for bringing u up
Speaker 2: today with the latest developments there. That's our senior reporters
Speaker 2: Anthony's cuisine joining us from Tel Aviv this morning.
Speaker 1: Now let's go back to the story around COP twenty
Speaker 1: eight in the Climate talks. Is the world's biggest banks
Speaker 1: are heading to Dubai for what is Climate Day today?
Speaker 1: Industry Insight does there are raising questions about the sustainable
Speaker 1: finance achievements that banks have made amid concerns that they
Speaker 1: are overstating their impact. Joining us for more on this
Speaker 1: is our markets reporter Greg Ritchie. I good to have
Speaker 1: you back on radio. What is it that banks are
Speaker 1: doing that is now facing so much scrutiny?
Speaker 12: Thanks for having me.
Speaker 1: So.
Speaker 12: The background of this is that all pretty much every
Speaker 12: single major global bank has set as sustainable finance targets.
Speaker 12: So that's why they commit to say we're raising one
Speaker 12: trillion dollars of sustainable finance by twenty thirty, and they
Speaker 12: often publicize that by saying this year we raise two
Speaker 12: hundred and fifty billion dollars towards our targets. The issue
Speaker 12: is that nobody has really defined sustainable finance in a
Speaker 12: coherent way that is the same across all banks. So
Speaker 12: some banks count deals that other banks wouldn't sustainable finance.
Speaker 12: That makes these figures completely uncomparable and very difficult to navigate.
Speaker 2: Does this put in peril the whole idea then, of ESG.
Speaker 2: If we can't define it, it makes it much more
Speaker 2: difficult to track.
Speaker 12: I think you're right to highlight that there's obviously been
Speaker 12: a lot of anti ESG rhetoric, particularly in the US,
Speaker 12: and even skepticism in other parts of the world. I
Speaker 12: think banks are operating in a vacuum right now where
Speaker 12: there isn't a regulatory definition of what is sustainable finance investments,
Speaker 12: and therefore they have to make up their own definitions.
Speaker 12: And I think if you're seeing some banks push the
Speaker 12: envelope a little bit in a way that is a
Speaker 12: little bit dubious, that's going to only add to the skepticism.
Speaker 1: Yeah, what have a few of the examples that you've
Speaker 1: turned up about what the different definitions in sustainable finance mean.
Speaker 1: What are some of the examples that you've got.
Speaker 12: So, I think one key example is M and A.
Speaker 12: It's obviously M and A deals are massive. They can
Speaker 12: go into the tens of billions of dollars, whereas some
Speaker 12: banks counting M and A transactions as being sustainable finance
Speaker 12: and other banks that are not. And you can quickly
Speaker 12: imagine that if one bank doesn't, one bang doesn't, that
Speaker 12: quickly skews their figures. So when it comes down to
Speaker 12: things like that, that can completely change the understanding. Do
Speaker 12: you also have very niche products like ESG derivatives, lots
Speaker 12: of banks don't touch them, don't think they're sustainable finance.
Speaker 12: Other banks count them towards their targets very quickly. You
Speaker 12: can see the inconsistencies add up.
Speaker 2: So how then can investors and consumers who want to
Speaker 2: know where the money is going, how a particular bank
Speaker 2: is behaving, How can they actually assess that?
Speaker 12: It's very difficult for them, and that is the problem.
Speaker 12: I'm speaking to a lot of researchers who are specializing
Speaker 12: on this, and they struggle to navigate this through all
Speaker 12: the disclosures, for all the small prints. So if your
Speaker 12: consumer and want to know of your bank is actively
Speaker 12: contributing towards the climate transition, you can speak to experts,
Speaker 12: you can read news articles about them, but it's very
Speaker 12: difficult to find a single number that will tell you
Speaker 12: this bank is better than this bank.
Speaker 1: Okay, regulators looking into this now, then.
Speaker 12: They are, I think the Financial Conduct Authority in the
Speaker 12: UK they wrote led it to the banks heads of
Speaker 12: VSG earlier this year and they raised a number of concerns.
Speaker 12: One of them was the fact that lots of bankers
Speaker 12: their remuneration, their bonuses are set to the meeting of
Speaker 12: these targets, and that creates potential conflicts of interests. You
Speaker 12: can imagine that if you're banker and you want to
Speaker 12: achieve your bonus, you might be pressured to slap the
Speaker 12: sustainable label on a product that baby doesn't meet the
Speaker 12: grades in order to help you meet that bonus. So
Speaker 12: they started to think about it and think it might
Speaker 12: seem more formal regulatory intervention in the coming years.
Speaker 2: Are the banks themselves worried about being accused of greenwashing?
Speaker 7: Definitely.
Speaker 12: So I speak to quite a few of the heads
Speaker 12: of ESG for the story, and one thing that they
Speaker 12: keep on telling us is how courses they're becoming. You know,
Speaker 12: maybe two years ago they would have put a label
Speaker 12: on something that they wouldn't do. Now that's because of
Speaker 12: the increased scrutiny, and many of them think that next year,
Speaker 12: as last laps up, that they're going to face many
Speaker 12: different green washing risks that they need to navigate.
Speaker 1: Okay, it's a really interesting piece, great research. Greg, thank
Speaker 1: you so much for joining us and talking us through
Speaker 1: that story around green financing. And the biggest banks in
Speaker 1: the world are Greg Ritchie. They're our markets reporter.
Speaker 2: Now, Bill Gates says the world probably won't meet the
Speaker 2: Paris Agreement's goal of keeping the rise in global temperatures
Speaker 2: to one and a half degrees. However, the Microsoft co
Speaker 2: friend or praise the COP twenty eight summitch for making
Speaker 2: progress untackling climate change despite geopolitical tensions. Okay. When speaking
Speaker 2: to Bloomberg's Francine Laquat in Dubai, she asked him how
Speaker 2: he measures success in this field.
Speaker 7: I'm optimistic in general.
Speaker 6: A lot of the power of human innovation is showing
Speaker 6: here and in all the work I do.
Speaker 7: What does that mean?
Speaker 13: Does that mean that you measure success as in pledges?
Speaker 13: Do we measure success as trying to do better and
Speaker 13: putting more money where it should be.
Speaker 6: Well, in the end, it's all about the human condition.
Speaker 6: You know, more people are living longer. You know, we've
Speaker 6: cut childhood death and half claimate is this negative thing
Speaker 6: that's slowing down that progress? And so in mitigation, you know,
Speaker 6: we want to make sure the temperature doesn't get too high,
Speaker 6: and then an adaptation, we want to make sure that
Speaker 6: the ill effects that whatever we can't mitigate, that it
Speaker 6: doesn't reverse this incredible rate of human improvement.
Speaker 7: But what are you.
Speaker 13: Most optimistic about? Is it business or is it actually
Speaker 13: leaders coming together with pledges?
Speaker 7: Well?
Speaker 6: Climate change overall, it's a challenge to the world. Hydrocarbons
Speaker 6: have been very cheap. Our economy is built around you know, coal,
Speaker 6: gas oil, and so we have to make this change.
Speaker 6: The progression of inventing new approaches green approaches, and then
Speaker 6: implementing them and over time scaling them and getting them
Speaker 6: so cheap what I call zero green premium. You first
Speaker 6: have to have risk capital. Then you have to have
Speaker 6: bigger amounts capital, eventually as they say, trillions of dollars
Speaker 6: to get every country to replace its steel plants, a
Speaker 6: cement plans, and so depending on the emissions area. Some
Speaker 6: of these things like steel and cement were at the
Speaker 6: very early stage. Some like electric cars at least at
Speaker 6: the high end the green premium you could say zero,
Speaker 6: not for low cost cars where you park on the street.
Speaker 6: But you so all these things and the faster we go,
Speaker 6: the less temperature increase.
Speaker 7: We'll see.
Speaker 13: But do you think we're going fast enough to actually
Speaker 13: hit the targets that were set out in the Paaris agreement.
Speaker 6: No, we won't hit hit no to aspirational targets. Well,
Speaker 6: you can do the math on one point five and
Speaker 6: even two point zero. Isn't that likely?
Speaker 7: Now?
Speaker 6: Fortunately, if you stay below three, a lot of the
Speaker 6: ill effects that people have heard about don't happen unless
Speaker 6: you really are irresponsible and let it get up to
Speaker 6: the the higher range.
Speaker 13: Where do you see the role of fossil fuels going forward, Well.
Speaker 7: We have to outcompete fossil fuels. Now.
Speaker 6: To do that properly, they you know, they shouldn't get subsidies,
Speaker 6: and in fact, a carbon tax over time should be
Speaker 6: put on so that the new you know, say the
Speaker 6: electric car or the plane that use hydrogen, the fact
Speaker 6: that it doesn't emit carbon, you're helping it get adoption.
Speaker 6: Those companies have skills, you know, if you want to
Speaker 6: sequester carbon or you know, nuclear wayte or there's a
Speaker 6: lot of skills if you want to make biofuels.
Speaker 5: Uh.
Speaker 7: You know, some of those.
Speaker 6: Companies will take the capital and skills they have.
Speaker 5: Uh.
Speaker 6: You know, so I wouldn't you know, say okay, I
Speaker 6: wish they weren't there. You know, people still, you know,
Speaker 6: there's no country that can say, okay, we have zero emissions.
Speaker 7: Uh. You know, people want to drive to work.
Speaker 11: You know.
Speaker 6: In fact, the excess supply when Russia cut off its
Speaker 6: supply in the world was sort of glad that that
Speaker 6: was available, and so, yes, oil and gas needs to
Speaker 6: be out competed, and those companies need to join the effort.
Speaker 13: I know you look at a lot of technologies and
Speaker 13: a lot of innovation, But is there one thing that
Speaker 13: you've been most excited about in the past five years
Speaker 13: or that you're most excited about for the future. I
Speaker 13: know we talked about nuclear fuel. I mean we talk
Speaker 13: a lot about the really big, you know, exciting stuff.
Speaker 7: What are you excited about?
Speaker 6: Well, you know, I love all my children, and I
Speaker 6: have these one hundred companies, and you know, I never
Speaker 6: knew that we'd get a new way to make steel
Speaker 6: or cement or beef. It's fair to say that if
Speaker 6: we can get either nuclear fission or fusion to be
Speaker 6: safe and broadly accepted and very economic because it's not
Speaker 6: whether dependent, it would be very complementary to the large
Speaker 6: amount of solar and wind that we're putting into our
Speaker 6: electric system.
Speaker 7: And so I'm biased.
Speaker 6: I'm a huge investor in both fission and fusion and
Speaker 6: hoping that it comes in time. We can't count on it,
Speaker 6: you know, fission it has been too expensive, and fusion
Speaker 6: doesn't exist yet.
Speaker 13: But Fusion fifteen years from now, like what's your I
Speaker 13: know it's a guess. At the moment.
Speaker 6: Well, of the four companies I'm invested in, one of them,
Speaker 6: Commonwealth Fusion has a credible path. Things will have to
Speaker 6: go well that in the late twenty thirties they'd be
Speaker 6: making electricity and start to scale it up. So that's
Speaker 6: an aspiration. But it's a great company. And we have
Speaker 6: three others that aren't quite that early, but you know,
Speaker 6: are within five to ten years of that.
Speaker 2: This is Bloomberg Daybreak Europe, your morning brief on the
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